Example of Overproduction

Overproduction is a situation which arises when goods are produced in greater volumes than the market requires. There's no demand for these products, so the production is effectively wasted, and/or done at a loss. This is actually quite common, particularly in the cheap goods lines, where the markets are saturated with cheap and usually shoddy goods. The products are effectively dumped on the market in bulk, where sellers make money on volumes, rather than unit prices.